VTRU WACC - Weighted Average Cost of Capital
The WACC of Vitru Ltd (VTRU) is 11.9%.
| Range | Selected | |
| Cost of equity | 5.5% - 7.9% | 6.7% |
| Tax rate | 31.4% - 48.7% | 40.05% |
| Cost of debt | 9.1% - 48.0% | 28.55% |
| WACC | 5.9% - 17.8% | 11.9% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.36 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 7.9% |
| Tax rate | 31.4% | 48.7% |
| Debt/Equity ratio | 1.46 | 1.46 |
| Cost of debt | 9.1% | 48.0% |
| After-tax WACC | 5.9% | 17.8% |
| Selected WACC | 11.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VTRU | Vitru Ltd | 1.46 | 0.74 | 0.41 |
| AMBO | Ambow Education Holding Ltd | 0.04 | 0.91 | 0.89 |
| CHN.V | China Education Resources Inc | 1.74 | 0.36 | 0.18 |
| CLCN | Creative Learning Corp | 0.18 | -0.32 | -0.29 |
| EDTK | Skillful Craftsman Education Technology Ltd | 0.89 | -0.18 | -0.12 |
| EVCI | EVCI Career Colleges Holding Corp | 25.8 | 0.49 | 0.03 |
| FEDU | Four Seasons Education (Cayman) Inc | 0.01 | 0.46 | 0.46 |
| METX | Meten Edtechx Education Group Ltd | 15.18 | 1.61 | 0.17 |
| ONE | OneSmart International Education Group Ltd | 34.06 | 0.09 | 0 |
| TEDU | Tarena International Inc | 0.58 | -0.28 | -0.21 |
| Low | High | |
| Unlevered beta | 0.02 | 0.17 |
| Relevered beta | 0.04 | 0.31 |
| Adjusted relevered beta | 0.36 | 0.54 |
VTRU's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for VTRU:
cost_of_equity (6.70%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.36) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.